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  • Writer's pictureInsource Funding

Discover 9 Hidden Gems: Affordable Short-Term Rental Markets for Smart Investors

Insource, Funding, short term, rental markets

Key Insights

  • Luxury vacation rental occupancy rose from 49.1% to 55.9% between 2019 and 2023.

  • Small Atlantic coastal markets saw an 8% increase in bookings compared to last year.

  • There are still lucrative short-term rental opportunities under $500,000.

The short-term rental market is thriving. According to AirDNA, luxury vacation rentals have seen a significant rise in occupancy and revenue, reaching $64 billion in 2023. Despite lower occupancy rates compared to long-term rentals, vacation rentals often serve as medium-term rentals in the off-season.

Short-Term Rental Markets & East Coast Hot Spots

Data from Skift and AirDNA indicates that East Coast beaches are popular this summer, with a 7.7% increase in booked nights. Myrtle Beach, South Carolina, leads the trend, replacing New York in top vacation spots.

Investors looking for properties with high-revenue potential under $500,000 should consider these locations based on desirability, income potential, management costs, and appreciation.

Top Investment Locations

Columbus, Georgia

  • Home Value: $161,000

  • Occupancy: 60%

  • Daily Rate: $178

  • Revenue: $29,000

Columbus, known for its whitewater rafting on the Chattahoochee River, offers a great investment opportunity at $161,000. It tops AirDNA’s Best Places to Invest in 2024.

Oneonta, New York

  • Home Value: $211,000

  • Occupancy: 60%

  • Daily Rate: $356

  • Revenue: $27,000

Oneonta is an affordable gem in upstate New York with high daily rates. Its proximity to Robert V. Riddell State Park makes it attractive year-round, including as a winter retreat.

Fairbanks, Alaska

  • Home Value: $239,000

  • Occupancy: 65%

  • Daily Rate: $225

  • Revenue: $32,000

Fairbanks offers great summer rental income, with a typical home price of $239,000. Its popularity as a vacation spot has grown, boosting revenue potential.

Fennville, Michigan

  • Home Value: $309,000

  • Occupancy: 56%

  • Daily Rate: $595

  • Revenue: $63,000

With a landscape of orchards and vineyards, Fennville offers high annual revenue. An investor could use an FHA loan and low initial investment to secure a property here.

Ashford, Washington

  • Home Value: $323,000

  • Occupancy: 67%

  • Daily Rate: $242

  • Revenue: $44,000

Ashford, near Mount Rainier National Park, is an affordable and scenic STR haven. Regulations ensure a cozy, small-scale rental experience.

Beaufort, South Carolina

  • Home Value: $347,000

  • Occupancy: 61%

  • Daily Rate: $234

  • Revenue: $40,000

Beaufort’s Southern charm and historic district make it a desirable investment. Its laid-back atmosphere and waterfront park attract many visitors.

Kitty Hawk, North Carolina

  • Home Value: $350,000

  • Occupancy: 64%

  • Daily Rate: $434

  • Revenue: $38,800

Kitty Hawk, in the Outer Banks, offers strong investment metrics. Its attractions, including lighthouses and wild horses, draw tourists year-round.

Logan, Ohio

  • Home Value: $233,000

  • Occupancy: 57%

  • Daily Rate: $343

  • Revenue: $57,000

Logan, in the Hocking Hills region, is a rural retreat with numerous summer activities. Its parks, rivers, and caves make it a popular tourist destination.

Mount Pocono, Pennsylvania

  • Home Value: $439,000

  • Occupancy: 47%

  • Daily Rate: $312

  • Revenue: $45,300

Close to major cities, the Poconos have long been a favorite for their natural beauty. The area has seen increased demand recently.

Owning a seasonal short-term rental with a strong summer clientele can sustain year-round income. Peak holidays like Memorial Day, Independence Day, and Labor Day are particularly lucrative. To optimize profits, consider hiring a good management company and leveraging tax benefits for rental properties, including expense deductions.

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